Greece's economy to recover in 2nd half 2016: Report

1.9 pct growth next year to follow Greece's recovery in second half of 2016, says new OECD report

By Magda Panoutsopoulou

ATHENS (AA) - The Organization for Economic Cooperation and Development (OECD) issued a twice-yearly Economic Outlook report on Greek economy stating that its economy is expected to recover in the second half of 2016 and to achieve growth rates of 1.9 pct in 2017.

"Growth is projected to turn positive in the second half of 2016 after a deep and prolonged recession as recovering confidence boosts investments and consumption and improved competitiveness boosts exports," the OECD stated.

The report also mentioned that the Greek GDP is expected to fall by 0.2 pct this year after a 0.3 pct decline in 2015.

Unemployment rate remains at very high levels “which is causing serious social problems” -- (24.2 pct on February Euro stat source) the organization projected that it is expected to fall to 24 pct of the workforce this year, from 24.9 pct in 2015 and 26.5 pct in 2014 and to fall to 23.2 pct in 2017.

"A modernization of the Employment Organization and expanding active policies in the labor market could reduce unemployment," the OECD said.

Regarding the country's public debt, the OECD stated that: "The huge burden of public debt undermines investments and confidence, making necessary some form of additional debt burden measures such as extending maturities.”

Concerning the VAT which as of June it was raised from 23 to 24 pct after the government approved it last month, the OECD stated that “VAT increases will temporarily boost inflation in 2016 but the consumer price index will remain in negative levels, or close to zero for the year because of a very slow economic activity, the OECD said projecting a zero inflation rate in 2017.